The Asian private banking industry is notorious for poaching but after a decade of waging a talent war, many institutions are changing tactics.

Singapore is on track to overtake Switzerland as the largest private wealth hub (Source: Getty Images)

Headhunters and hiring managers are increasingly recruiting corporate and investment bankers with similar skills, growing their own talent, and restructuring roles as they continue to build in the region.

“Practices are definitely evolving,” said Bernard Rennell, regional head of private banking, HSBC, Asia-Pacific, which is recruiting relationship managers and investment counsellors. “It is no longer a sustainable model to parachute an entire team in from a competitor. There is now a more considered approach and, particularly for the larger international banks, it is important that the individuals brought in fit into the wider organisational culture.”

Private banking assets in Asia-Pacific have grown dramatically during the past 10 years. Singapore is home to about US$1.29 trillion and is on track to surpass Switzerland as the world’s largest private wealth hub in five years’ time, according to WealthInsight.

Private bankers need to build strong, loyal relationships with wealthy clients. They need to wine, dine and entertain them, as well as watching the markets and furnishing clients with savvy investment advice. It is a mixed skill set in hot demand as international and local private banks exert themselves to tap Asia’s new generation of wealthy.

Talent shortage

Ravi Raju, head of Asia Pacific at Deutsche Bank Asset and Wealth Management, said: “There’s a huge dearth of talent for sure.”

Jonathan Hollands, managing director at recruitment firm Carraway Group in Hong Kong, said: “The struggle for talent is as competitive, if not more competitive, as it has ever been.”

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Poaching top talent from rivals has traditionally been rife in the Asia private banking industry because relationship managers are expected to bring their wealthy clients with them and have been handsomely rewarded for doing so. Senior private bankers can expect to receive a rise of between 20% and 30% in basic pay when they move, said John Koh, managing director at executive search firm Wealth Management Resource Centre in Singapore.

But as clients tire of being dragged from bank to bank, bankers and recruitment consultants agree that this pattern is changing.

Raju said: “Clients don’t want a relationship manager moving through a new door every two months. Clients say ‘I got used to dealing with you, there might be an issue with the relationship manager, tell me why that person left, then I’ll still do business with you’.”

Michael Blake, general manager at Coutts Asia, which is looking to double its staff numbers in the medium term, said: “I think that merry-go-round that we’ve seen since the 2000s is slowing down: clients are not moving as readily as they used to.”

In the past, a banker with client relationships worth $500 million in assets could expect to bring up to 60% with him, but that figure has declined to about 25%, estimates Hollands.

Commercialisation

Paul Endacott, managing director for south-east Asia at recruitment firm Ambition in Singapore, said recruitment practices were becoming “more creative”, with a growing focus on hiring from corporate banking where long-term client relationships are also key. Many corporate bankers have long-standing small company clients and are in a position to bring wealthy business owners in as private banking customers – although the cultural fit is not perfect. “The private banking culture is smoother and more polished, corporate bankers are a bit rough around the edges,” said Endacott.

Rennell said HSBC was increasingly tapping commercial bankers in the group in a bid to leverage existing corporate relationships. Commercial experience among private bankers is valuable as wealthy Asian clients seek products and advice that can help them grow their businesses and access the capital markets.

Rennell said: “Our recent hiring has involved mining the depth of talent that there is within HSBC and we have that advantage. We are bringing in those with commercial banking experience, as linking and understanding a client’s personal and corporate needs is increasingly important for our business model.”

Raju said: “Clients are looking at getting access to capital to expand their business and the ultimate is the IPO. The Asian tycoon is very different from the old wealth in Europe.”

Private banks are also setting their sights on pricey investment bankers, especially equity capital markets bankers who may already have helped clients to get rich floating their businesses. However, the transaction-driven nature of investment banking does not always make for an easy transition into private banking, said Hollands.

Blake said Coutts was investing in hiring and training more junior bankers. “We have looked at a number of ways to source talent and home-grown talent is very much top of our agenda,” he said: “We feel this very much enables us to develop bankers that grow with us in the long term and are entrenched with the client principles and DNA that is Coutts.”

Blake added that he believes this approach makes for a more loyal workforce.

In some cases, private banks are also restructuring roles, splitting up the investment and client-facing functions. Hollands said: “That way you can leave it up to the relationship manager to play golf and drink gin and tonics, without also having to keep an eye on the markets. This approach is also much more sustainable, as the client has multiple touch-points and the strength of the relationship is with the bank.”

He cited JP Morgan as a good example of this trend. The bank was unable to provide a spokesperson in time for publication.

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